How the U.S. Patent Office Screws Over the Cannabis Industry

The next quantum leap forward for the cannabis industry won’t be in banking or tax codes, though most marijuana firms would love the ability to put their money in a bank or claim business expenses on their annual returns like a normal entrepreneur.

It’ll be in branding and intellectual property—because as one vape-pen producer is finding out, in addition to the prohibitions on checking accounts and normal tax accounting, cannabis companies can’t trademark their own brands.

JUJU Joints makes single-use, cigarette-sized disposable vaporizers. They’re cool enough, but what would be cooler for the company is if the company had absolute rights to the name JUJU, and maybe even a slogan—like “powered by JUJU,” which no other company was allowed to use.

Keep in mind that while the federal government has issued patents to cannabis companies and even cannabis strains, registered trademarks are another issue. Up until now, cannabis companies have protected their brands by registering them as, say, a clothing company.

In this way, dispensaries like San Francisco’s Green Cross and cannabis-related brands like Cookies have been able to protect their identities while still being involved with marijuana—which, in case you’ve forgotten, remains banned under the federal Controlled Substances Act.

But JUJU doesn’t do beanies or hoodies, they do JUJU Joints. And as it explained in a recent precedent-setting opinion, the US Patent and Trademark Office’s Trademark Trial and Appeal Board doesn’t do cannabis.

JUJU argued that it should be allowed to have a trademark because alcohol and tobacco companies all have trademarked goods—and that since marijuana companies have been allowed to do business up until now despite violating the Controlled Substances Act, and continue to do so despite that violation, they should be allowed some measure of the brand protections enjoyed by companies in those other spaces. What’s more, JUJU argued, other companies use marijuana and cannabis in their trademarked branding without trouble.

None of that mattered, because JUJU’s trademark application is marijuana-specific. Other companies that sell energy drinks and consumer goods that are marijuana-related can have trademarks… as long as they aren’t actually dealing in anything illegal itself.

Because cannabis is illegal under federal law, and trademarks can be awarded only to legal goods, anything specifically pertaining to cannabis and only cannabis cannot be trademarked, the USPTO wrote.

Here’s a selection from their decision that outlines their reasoning:

“Applicant has explicitly identified its goods as vaporizing devices for cannabis or marijuana. The [Controlled Substances Act] makes it unlawful to sell, offer for sale, or use any facility of interstate commerce to transport drug paraphernalia, defined as “any equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under [the CSA].”

Therefore, we find that Applicant’s identified goods fall within the definition of illegal drug paraphernalia under the CSA. The identifications of goods make clear that Applicant’s devices are designed and intended for the introduction of marijuana or cannabis into the human body. Applicant has not disputed this fact in either case, and has acknowledged that its goods are “marijuana-related” and “optimized” for cannabis.

In conclusion, because Applicant’s identified goods constitute illegal drug paraphernalia under the CSA, Applicant’s use and intended use of the applied-for marks on these goods is unlawful, and cannot serve as the basis for federal registration.”

It doesn’t appear JUJU has any recourse to appeal the decision any further.

This spells trouble for Snoop Dogg and other mavens of branded marijuana, as the legal experts at Lexology.com point out. Snoop is seeking to trademark “LEAFS BY SNOOP” and a golden-leaf logo to be put on lighters, potting soil, blunt wraps—and other items that, applying the standard used in the JUJU decision, could be described as drug paraphernalia.

What could save cannabis companies from trademark hell is rescheduling. Marijuana is a Schedule I controlled substance, and no Schedule I substance can be distributed or sold legally under federal law, let alone branded. However, there are plenty of Schedule II drugs with trademarked brand names: they’re called prescription pharmaceuticals.

A rescheduling petition was most recently shot down in August, but there’s nothing stopping Congress from moving marijuana to Schedule II—nothing aside from obstructionist committee chairs, who have to date refused to call several rescheduling bills introduced in both the House and the Senate for a hearing, thereby ensuring the bills die in limbo.

So could we see marijuana brands all of a sudden spending lobbying dollars to protect their intellectual property? The episode suggests that before we’ll see anything “POWERED BY JUJU,” we’ll see a member of Congress, powered by Snoop.